India: Populous Country or Aging Society?

The recent discussion about population control sparked by the ruling party and the UP government’s bill is a bit perplexing because the government's academic stance differs. The economic survey 2018-19 (ESI 2018-19) raises concern over rapidly declining population growth as well as falling total fertility rate. It also suggests that few states will begin to transition to an aging society.

There are two important questions (ignoring the religious argument. According to NFHS-4 (2015-16) and NFHS-5 (2019-20) (National Family Health Survey), almost all religions are witnessing the decline in fertility rate).

1) Is the population actually growing?

2) Population and (vs) Development: Population or Human Capital?

1) Is the population actually growing?

India's annual population growth rate is already decreasing (Fig. 1). For the majority of states, population growth is less than one. It is highest in Bihar, with a population growth rate of less than 2 (Fig. 2).

Figure 1: Annual Population Growth Rate in India (percent)

Source: Census 2011, International Institute for Population Sciences (IIPS) estimates, taking from ESI

Figure 2: Annual Population Growth Rate by State during 2011-16 (per cent)

Source: Census 2011, International Institute for Population Sciences estimates, taking from ESI

The Economic Survey of India suggests that the decline in population is primarily driven by the decrease in the total fertility rate.

Figure 3: Total Fertility Rate for India

Source: Sample Registration System, taking from ESI

The total fertility rate is the number of children born or expected to be born to a woman of childbearing age over her lifetime. Therefore, it has a direct link to population growth. Fig. 3 suggests that the total fertility rate for India is declining continuously. This total fertility rate depends on the level of development.

Table 1: Income category wise fertility rate

Income group	mean fertility rate
Low income	4.58
Lower middle income	3.16
Upper middle income	2.17
High income	1.67
Total	2.60

Data source: World Bank Open data source. The author has calculated the average fertility rate based on data for countries in 2019. The income categories are defined by World Bank.

Table No. 1 shows that the average fertility rate decreases as one moves from low to high income. This supports the literature that shows that fertility rates decline as income rises since income, education, and health are all positively associated, and therefore as income rises, fertility rates fall due to educational advancement. Figure no. 4 reflects this argument as for categories, there is a trade-off between per capita GDP and fertility rate. 

Figure 4: Fertility rate-per capita GDP

Data source: World Bank Open data source. The author has calculated the average fertility rate based on data for countries from 1960. The income categories are defined by World Bank.

The Economic Survey of India 2018-19 estimates the total fertility rate till 2041. All states will have a total fertility rate smaller than the replacement rate (Fig 6). Few states are already witnessing a lower fertility rate.

Figure 6: Estimated TFR

Source: Census 2011, International Institute for Population Sciences estimates, taking from ESI.

Combining all figures, it can be argued that

a)     India’s population growth rate is declining.

b)     It will continue to decline as the country's development status improves.

2) Population and (vs) Development: Population or Human Capital?

The relationship between population and (or against) development is widely debated. Malthusians express concern about the growing population which puts the burden on food But, thanks to technological advancements, the food supply has increased fairly where the growth of the population has not put the burden on the food supply. Further “neo-Malthusians” argue that population expansion has harmed the ecological balance by causing deforestation and land degradation. but is it only due to population? Not only does the population represent consumption, but it also represents manpower. The question is whether that manpower is getting utilized properly or not. The question is whether the population is getting reflected into “human capital” or not. According to World Bank, human capital consists of the knowledge, skills, and health that people invest in and accumulate throughout their lives, enabling them to realize their potential as productive members of society (https://www.worldbank.org/en/publication/human-capital). The world bank measures human capital based on health and education indicators.

Table 2: Human Capital Index

Country Name	2018	2020
Russian Federation	0.73	0.68
China	0.65	0.65
Brazil	0.55	0.55
India	0.48	0.49
South Africa	0.42	0.43

Data source: World Bank.

In BRICS nations, India stands second last in the human capital index (Table no. 2). China, the most populous country has human capital index higher than India. Not population but not having human capital is a problem. Developing human capital not only helps for economic growth but also can make an ecological balance. Investing the gains from ecological degradation into human capital can stop the degradation of “overall capital or resources including human capital”. That can make the population less dependent on existing resources.